8 Types of Equity Mutual Funds In India

There are 8 Types of Equity Mutual Funds, let’s understand all types of equity mutual funds and know the best Equity Fund for your investment needs.

Make the most of your investments with equity mutual funds. Equity mutual funds or equity funds, primarily invest in shares of companies. They are a good opportunity for people looking to invest in good companies that have the potential growth.

8 Types of Equity Mutual Funds

1. Equity Linked Savings Scheme:

  • ELSS – an opportunity to save tax and create wealth.
  • Long-term capital gains are tax free.
  • Short lock in period of 3 years.
  • Invest systematically through SIP’s to bring discipline to your tax planning.

2. Large Cap / Blue-Chip Funds:

  • Large Cap / Blue Chip funds invest in reputable and financially sound large cap companies.
  • They Aim to strengthen and provide stability to your equity portfolio.
  • Provide sustainable returns over a longer period of time.

3. Mid and Small Cap Funds:

  • They invest in mid-sized and small companies.
  • Can potentially take better advantage of reviving economy.
  • Short term investments may be subject to volatility, so it is suitable for high-risk and long-term investors profile.

4. Diversified Equity Funds:

  • Allocate investments across sectors, thereby minimizing risk
  • Aims to provide long term growth
  • Suitable for investors with a moderate risk profile

5. Equity Index Funds:

  • Invests in stocks in the same proportion as they are in the index
  • Low expense ratio
  • Sensitive to market risks

6. Dividend Yield Funds:

  • They invest in companies, which can provide returns consistently
  • Provides capital appreciation to the portfolio
  • Relatively less volatile compared to other equity funds

7. Sectorial Funds:

  • Invest in a particular sector or industry such as Pharmaceutical, FMCG and Information Technology
  • Performance of the funds is dependent on the sector being invested in
  • Diversification is low so they carry a high sector specific risk

8. Contra Funds:

  • Invests in stocks that are undervalued but have growth potential in the long run
  • Gain predominantly from long term investments
  • Invest during low stock values and benefit when the market potential of the stocks is recognized

Personalize your portfolio with the various Equity Mutual Funds to suit your investment needs.

If you have any query then tweet me @gurpreet_saluja

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